Question

2. Discuss in details the essentials of a valid contract. (8)

3. How the political risk factors can be assessed and how the risks are prioritised? (8)

Answer 1

2. For a contract to be valid some essentials are required to be fulfilled. They are

a. There must be free consent for all the terms and conditions of the contract from both the parties.

b. There must be an offer and acceptance in which one party offers somethings and the other party accepts it.

c. Both the parties must be capable enough to enter the contract .

d. There must not be any sort of illegal terms or conditions and if there are any the contract is not valid.

e. All the legal formalities must be done in order to make a contract valid.

f. There must always be some sort of considerations for the contract where there is always some sort of payments for the things done by the other party.

e. Both the parties must agree with the policies of the contract and must believe them to be genuine and valid.

3. Political risks are the risks which effects organizations economically , politically or socially, The factors that cause these risks are called political risk factors. Political risk factors might be macro level or micro level. Macro level risks factors are those which are common for all the organizations whereas micro level risks are the risks which effect only few organizations, These factors needs to be analysed and the effects they might have must be understood . They need to be identified and solved immediately so that no issues would be created. Any rules and regulation violations might result in political risks and also how the political events change directions will also effect the businesses. Factors that are common and highly risk causing and can be resolved must be given high priority and the factors that might or might not cause risks must be given the next priority . Some sudden risks causing factors might not be controlled easily and we cannot do anything to avoid them . These can be given low priority as they might or might not occur, Hence risks can be prioritized depending on their level of occurence and their impact .